Indianapolis is home to two of the nation's biggest REITs: Simon Property Group and Duke Realty Corp.

Goldman Sachs & Co. analyst Jonathan Habermann expects a return of 5 percent to 10 percent this year after last year's 29-percent total return for REIT stocks.

"At the same time, given the improving growth outlook for the U.S. economy combined with still low interest rates, we simply do not see significant downside for the shares," he wrote.

Habermann maintained a "Neutral" view on the REIT industry. He said Goldman's equity analysts expect the Standard & Poor's 500 index to rise to 1500, a 21-percent increase, by the end of 2011. REITs however, may grow more modestly, by as much as 10 percent. His top buy recommendations include Digital Realty Trust Inc.

Habermann also upgraded AvalonBay Communities Inc. to "Buy" from "Neutral" and raised the price target to $121 per share from $98.

Also upgraded to "Buy" from "Neutral" was Vornado Realty Trust. The price target was boosted to $92 from $89.

Duke Realty was upgraded to "Neutral" from "Sell" on an improved balance sheet and portfolio. A price target of $12 was retained.